CANADA STOCKS-TSX slides to 12-week low as resources sink

Reuters Staff

3 Min Read

* TSX ends down 144.95 points, or 1.2 pct, to 12,178.66
* Index hits lowest level since January
* Suncor, golds lead names on downside
By Claire Sibonney
TORONTO, April 4 (Reuters) - Sinking commodity stocks led
Canadian equities to a near 12-week low on Wednesday, a day
after the U.S. central bank crushed hopes for more monetary
stimulus and as a weak Spanish bond auction signaled the effects
of earlier European funding operations may be waning.
Big names on the downside included Suncor Energy,
which plunged 4.5 percent to C$31.26, Goldcorp, which
lost 4.9 percent to C$40.98 and Barrick Gold, which
slid 3.2 percent to C$41.16 as the price of gold fell to its
lowest levels in nearly three months.
"We've seen a steady decrease in optimism that the Fed would
embark on easier monetary policy in recent weeks and the gold
group has been under pressure ever since, so has gold for that
matter," said Elvis Picardo, strategist and vice-president of
research at Global Securities in Vancouver.
Energy companies were also hit by retreating oil prices,
which ended about 2 percent lower, after testing key technical
support levels. U.S. government data showed crude stockpiles in
the world's top consumer jumped last week to a nine-month high.
Suncor in particular however was also hurt by news that its
output was down more than 40 percent in March from February.
The Toronto Stock Exchange's S&P/TSX composite index
ended down 145.02 points, or 1.18 percent, to
12,178.59. Earlier in the session, the index hit its weakest
level since Jan. 13.
Comments from European Central Bank President Mario Draghi
that the euro zone's economic outlook is subject to downside
risks related to the debt crisis also dented risk sentiment.
The flight from stocks and commodities followed through on
Tuesday's selloff, after the Federal Reserve's minutes from its
March meeting suggested the appetite for a third dose of
quantitative easing, so-called QE3, has decreased.
Meanwhile on Wednesday, Spanish borrowing costs jumped at
bond auctions, raising concerns that the rally in troubled
peripheral sovereign debt sparked by the European Central Bank's
two Long-Term Refinancing Operations may be coming to an end.
"We've seen headline risk out of Europe recede very sharply
in recent months so anything that comes out that again refocuses
attention on the issue tends to have a negative impact in
markets," added Picardo.
In other individual company news, shares of Canadian
home-improvement retailer Rona Inc slipped 1.2 percent
to C$10.35 after the company said it was not for sale.
WestJet Airlines bucked the broader market trend,
climbing 2 percent to C$13.62 after reporting it flew fuller
planes in March despite higher fares.